For India’s millennials, this startup gives loans for gadgets

The Finomena team.

Big data is not always evil. In fact, depending on what it’s used for, it can benefit communities.

If you know how to analyze big data correctly, you can figure so much out about India.

Count Finomena among the guys aiming to do good with big data. A startup that lends small amounts of money to students and other millennials to make online purchases, it collects over 20,000 pieces of information – everything from public information on social networks to buying patterns on phone top-up websites – to figure out eligibility, interest rates, and the size of a loan.

“Never before in the history of the world has there been such an explosion of information about a single place,” says Riddhi Mittal, the co-founder of Finomena. “We believe that this data can be used to help those that have been financially excluded in the country.”

Riddhi and her co-founder Abhishek Garg were not two people you’d call “financially excluded”. Riddhi is a Stanford graduate who has worked at Facebook and Microsoft, and Abhishek is a graduate of one of India’s elite universities, IIT Delhi, and spent years working with Boston Consulting Group.

And yet, when Abhishek applied for a loan, he was rejected. “I had a salary of over US$150,000 with a credit score of 785,” he says. “That was when the realization hit me: if I couldn’t get a loan, how about everyone else?”

This thought spurred the two to find out more about the country’s buying behaviors, and together, they launched Finomena. “If you know how to analyze big data correctly, you can figure so much out about India,” says Riddhi.

It’s a bit early to say whether the startup will be successful, but just today it received a dose of confidence with an undisclosed amount of funding money. The round was led by Matrix Partners and ten angel investors, including Abhay Singhal, the co-founder of InMobi and Kaushal Aggarwal, the managing director of Avendus Capital.

More data, less problems

Once a potential borrower registers their phone number with Finomena, they can key in links of items they want to buy with a loan. Snapdeal, Amazon, or Flipkart – India’s three major ecommerce players – are supported. Users can then figure out the size of their down payment, how much they want to pay each month, and how long they’d like to pay for.

“We provide buyers with an end-to-end service,” says Riddhi. “Borrowers really don’t want to see the complexities that go behind figuring out a loan, and our technology makes it easy for them to get what they want.”

On the other end, Finomena scans the information that it has about the borrower to figure out how risky it is to give them a loan and, depending on that, how big it should be. Then, it sends info to one of its partner banks who then verifies and provides the loan.

Loans make the world go ‘round

Lending startups galore